Technical Analysis: 18 April 2021

About the author:

Violeta Todorova
Author name:
By Violeta Todorova
Job title:
Senior Technical Analyst
Date posted:
18 April 2021, 12:00 PM

S&P 500

The S&P 500 index has been trading in a strong secondary up trend since March 2020 which is still technically intact.

Friday’s price action posted a fresh record high of 4,191 pushing both the weekly and daily RSI indicators into overbought territory.

While the overbought momentum readings could trigger a pull back in the short-term to around 4,000 points, at this juncture in time we don’t see deterioration in the overall momentum conditions or a reversal on the price chart.

After a prolonged and strong up trend, the overbought weekly momentum readings are often the first red light flashing on the chart.

History shows that after reaching overbought levels on a weekly basis, the up trend could extend further for weeks, even a few months, before the up trend eventually gives up and a deep pull back or a trend reversal takes place.

Therefore, we are of the view that it’s time for investors to become cautious and alert and slightly start to raise their cash levels, which we would be looking to deploy once a deeper pull back unfolds.

NASDAQ Composite

The NASDAQ Composite index has been trading in a strong secondary up trend since March 2020 which is still technically intact.

The up trend has lost momentum over the past three months and the index has been fluctuating between 12,397 and 14,175. The current up swing is approaching its resistance of 14,175 which is the key level to monitor.

While in the short-term, the price may fail to break decisively above this level as the daily momentum indicators are approaching overbought levels, a subsequent break targeting 14,600 is possible.

The daily RSI indicator slightly deteriorated over the past month showing that the up trend is likely to slow down, however at this point there is no evident sign of a trend reversal.

The weekly momentum indicators are approaching overbought territory, therefore the price action should be monitored closely in the coming weeks.

S&P/ASX 200

The S&P/ASX 200 index has been trading in a slow but steady secondary up trend since March 2020 which is still technically intact.

The up trend has slowed down over the past three months and the index has been trading sideways.

The current short-term up swing decisively broke upwards the consolidation and appears headed for a re-test of its all-time high of 7,197 which is a key level to monitor.

While a subsequent break above this level is possible, we do not expect the index to reach significantly higher levels over the medium-term.

While at this point there is no reversal signal on the chart, the weekly and monthly momentum indicators are approaching overbought territory, suggesting that some caution is warranted as a deeper pull back could be seen soon.

AUD/USD

The AUD/USD has been trading in a strong secondary up trend since March 2020 which is still technically intact.

The recent price action rebounded close to its static and dynamic key resistance of 0.8100 where initial selling pressure is likely to arise.

The up trend has lost momentum over the past two months and the currency pair has been trading sideways, fluctuating between 0.7531 and 0.8008.

While a further consolidation or a deeper pull back in the short-term could be seen, a subsequent break above key resistance is likely. The potential long-term upside target is 0.8200.

Find out more

Morgans clients can login to view all recent technical analysis on companies we cover by browsing the research section and filtering by 'technical analysis' in the Market Updates section. 

If you would like access or more information, please contact your adviser or nearest Morgans office. 

Request a call  Find local branch

Need access to our research?

You are also welcome to start a two-week trial of our online platform, which provides access to detailed market analysis and insights, provided by our award-winning research team

Create trial account 

Disclaimer: The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.


  • Print this page
  • Copy Link